The bigger than expected increase in construction spending in December came as spending on public construction soared by 4.9 percent to an annual rate of $313.6 billion.

Spending on highway construction spiked by 11.8 percent to a rate of $99.9 billion, while spending on educational construction jumped by 2.2 percent to a rate of $77.8 billion.

The report said spending on private construction rose by 0.2 percent to a rate of $964.2 billion, as an increase in spending on non-residential construction was partly offset by a drop in spending on residential construction.

The Commerce Department said total construction spending in January was up by 0.3 percent compared to the same month a year ago.